Mylan Wins Preliminary Ruling on Bristol-Myers’ BuSpar Patent

Mylan Laboratories Inc. won a preliminary ruling in a patent dispute, clearing the way for approval of its generic version of Bristol-Myers Squibb Co.’s anti-anxiety drug BuSpar.

U.S. District Judge Ricardo Urbina ordered a new Bristol-Myers patent on BuSpar removed from the U.S. Food and Drug Administration’s so-called Orange Book, a listing of valid patents on drugs. Urbina also ordered the FDA to grant immediate approval for Mylan’s generic BuSpar.

“It’s very positive for Mylan,” said Angela Larson, an analyst at Salomon Smith Barney who has a “neutral” rating on Mylan. “I do think we’ll see a generic BuSpar, though I’m not yet confident enough on the timing to change my earnings estimates.”

Larson said she had cut her 2001 earnings estimate for Mylan by 5 cents after Bristol-Myers last year obtained the new patent extending its exclusive right to sell BuSpar. The drug had 2000 sales of $709 million.

Pittsburgh-based Mylan contended when it filed the lawsuit last November that it faced a “potential loss” of $31.2 million over the following 12 months if it couldn’t sell its generic version of BuSpar, according to Urbina’s opinion, released in District of Columbia federal court today.

Mylan is expected to earn $1.01 a share for the fiscal year ending March 31, the average estimate of analysts polled by First Call/Thomson Financial.

Mylan and Corona-based rival generic-drug maker Watson Pharmaceuticals Inc. had expected FDA approval in November on different dosages of buspirone, the generic equivalent of BuSpar. Mylan even had trucks loaded to start shipping its drug Nov. 22, the day Bristol-Myers’ patents were to expire. Instead, Bristol-Myers announced Nov. 21 that it had received a new BuSpar patent.

Mylan and Watson sued to block the patent.

Urbina noted in a 52-page opinion that the public likely will benefit from the ruling.

“By creating new--and probably impermissible--ways to extend its monopoly, Bristol not only limits the public’s access to low-cost drugs, but impedes the very innovation that [generic drug law] is designed to promote,” Urbina wrote.

He also said, “Mylan has shown a substantial likelihood that this court will issue [a] judgment stating that Bristol improperly submitted the patent for listing in the Orange Book.”

Watson shares rose $2.50, or 4.8%, to $54.50.